Bristol-Myers Squibb reports $12.2 billion in Q3 sales, increasing full-year revenue guidance by $750 million due to robust growth across key products.

OPERATOR - (00:01:25)

Welcome to the Bristol-Myers Squibb third quarter 2025 earnings conference call. All participants will be in a listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Chuck Triano, Senior Vice President and Head of Investor Relations. Please go ahead.

Chuck Triano - Senior Vice President and Head of Investor Relations - (00:02:07)

Thank you and good morning everyone. We appreciate you joining our third quarter 2025 earnings call. With me this morning with prepared remarks are Chris Berner, our Board Chair and Chief Executive Officer, and David Elkins, our Chief Financial Officer. Also participating in today's call is Adam Lenkowski, our Chief Commercialization Officer. And we welcome Christian Masacesi, our recently appointed Chief Medical Officer and Head of Global Drug Development. Earlier this morning we posted our quarterly slide presentation to BMS.com, that you can use to follow along with Chris and David's remarks. Before we get started, I'll remind everybody that during this call we will make statements about the Company's future plans and prospects that constitute forward looking statements. Actual results may differ materially from those indicated by those forward looking statements as a result of various important factors including those discussed in the Company's SEC filings. These forward looking statements represent our estimates as of today and should not be relied upon as representing our estimates as of any future date and we specifically disclaim any obligation to update forward looking statements even if our estimates change. We'll also focus our comments on our non GAAP financial measures which are adjusted to exclude certain specified items. Reconciliations of certain non GAAP financial measures to the most comparable GAAP measures are available at BMS.com finally, unless otherwise stated, all comparisons are made from the same period in 2024 and sales growth rates will be discussed on an underlying basis which excludes the impact of foreign exchange. All references to our P&L are on a non GAAP basis and with that I'll hand it over to Chris.

Chris Berner - Board Chair and Chief Executive Officer - (00:03:47)

Thanks Chuck. Welcome and thank you for joining our third quarter earnings call. Q3 was another strong quarter reflecting focused execution across the business as we continue to make progress on our plan to position Bristol-Myers Squibb for long term sustainable growth. Building on the momentum from the first half of the year, we saw continued strong demand across our growth portfolio, achieved positive clinical and regulatory milestones and further aligned our cost structure with the needs of our business. Let me start with a high level review of our quarterly performance on Slide 4. Our growth portfolio delivered another strong quarter with sales increasing 17% year over year, strengthening the foundation we're building with assets that are early in their life cycle. Growth was driven by multiple products including our IO portfolio, reblazil, chemxios and Brionzi. And due to our strong performance to date, we are again raising our top line guidance and maintaining the midpoint of our bottom line guidance. David will provide more details shortly. Our two recent launches performed well in Q3. Cabenfi is delivering steady growth as we continue to receive positive feedback from physicians on key indicators, supporting our expectation that this is a meaningful first indication for Cabenfi. Givantic's launch is also tracking well from a clinical and regulatory standpoint. I want to highlight a few recent updates on the clinical data side in our protein degradation platform. The Phase 3 Excalibur study for iberdamide in patients with relapsed or refractory multiple myeloma demonstrated a statistically significant improvement in MRD negativity rates. Now that we have these results in hand, we will be discussing these compelling data and potential paths forward with health authorities. The trial will continue to evaluate PFS, which is expected in 2026. CEL mods have the promise to be a new foundation in the treatment of hematological malignancies. More broadly, our multi pronged protein degradation platform has the opportunity to also address solid tumors, initially with our oral androgen receptor ligand directed degrader, among others. At the World Lung Conference last month, we presented Phase two data for palmitimig with our partners at Biontech. The clinical development program is both advancing and broadening for this important asset. Last month we initiated the Pivotal Triple Negative Breast Cancer Study and plan to share early data at the San Antonio Breast Cancer Symposium in December. Additionally, pivotal studies for palmitimig and chemotherapy combinations are now initiating in first line microsatellite stable colorectal cancer and first line gastric cancer. This week we announced encouraging data at the American College of Rheumatology Convergence Conference which continue to strengthen our conviction behind CD19-Next in autoimmune diseases and Sotik 2 in rheumatology. We presented additional follow up data for CD19-Next in both lupus and scleroderma and presented the first disclosure of data in myositis for Sotik 2. The long term extension data from the Phase 2 Paisley study continues to validate its potential in lupus as we look forward to Phase three results. On the regulatory side, we achieved several milestones which include our potential first in class Bispecific ADC Isabrin receiving breakthrough therapy designation for previously treated advanced EGFR mutated non small cell lung cancer and earlier this month the FDA granted fast track designation to our anti tau antibody for the treatment of Alzheimer's disease, currently in a phase two study with data expected to read out in 2027. Together, these milestones highlight the potential of our pipeline to both enhance and sustain growth in the outer years by addressing critical areas of unmet need and the importance of advancing these programs quickly and efficiently. On the business development front, we recently announced we are acquiring Orbital Therapeutics to strengthen our cell therapy franchise where we have industry leading expertise. This acquisition will add a potential off the shelf best in class asset OTX201 which can be administered in the community setting. This in vivo CAR T represents a novel treatment approach that could redefine how we treat autoimmune diseases. We will also gain access to Orbital's differentiated RNA technology platform which combines various RNA engineering and advanced delivery methods. In addition, we saw progress with our partner Systimmune as we announced that the first patient was treated in the global phase 2.3trial of Isabrin in previously untreated triple negative breast cancer ineligible for anti PD L1 drugs. In August, we closed the previously announced licensing agreement with Phylochem for exclusive worldwide rights to OncoACP3, potential best in class radiopharmaceutical therapeutic and diagnostic agent with the opportunity to become a breakthrough treatment for prostate cancer. We continue to be excited about the overall opportunity with radiopharmaceuticals and believe Phylochem added to RAISE offer a transformational platform for cancer treatment. In terms of progress, we opened a US manufacturing hub with the ability to deliver RAISE's next generation radiopharmaceutical therapies directly to patients within just three days of production, a critical advantage due to the short shelf life of RPTs. The facility is currently manufacturing clinical doses of RAISE101 which is in phase 3 clinical trials for GEPNETS. Moving on to key data catalysts on slide 5. As we've said before, we are entering a data rich period. We continue to anticipate data readout for Adept 2 by the end of this year and have two additional cobinfi studies in Alzheimer's disease psychosis, both of which are expected to read out next year. We anticipate needing two of these three studies to readout positively to support regulatory approval. The pace of pivotal readouts will accelerate in 2026. As a reminder, over the next 12 to 24 months alone we expect data for seven new molecular entities and seven meaningful life cycle management opportunities. Among others, we will see data for EDMOParent and IPF, a fatal lung disease with high unmet need Celmods Iberdomide and mosigdamide, which represent a significant step forward in the treatment of multiple myeloma. The broad Milvexian program where we are running three large phase three trials to address ongoing unmet needs for patients with cardiovascular disease, including an AFIB trial that could potentially open treatment to at least the 40% of afib patients not suitable for factor 10 as today cobenfi in a broad range of Alzheimer's related neuropsychiatric conditions and sotic 2 in lupus and sjogren's. Together these represent an attractive set of near term catalysts that can further shape our pipeline and longer term growth trajectory. Given the significant commercial potential of these indications and looking out a bit further, by the end of this decade we have the potential to introduce 10 new medicines to the market and at least 30 significant lifecycle management opportunities. This strategy is designed to set bms on a clear path of strong and sustainable growth which remains our guiding principle. Beyond the specific commercial and R and D highlights, the company continues to focus on strong financial discipline consistent with prior quarters. While we generated significant cash flow in the third quarter, we also continue to be prudent in managing our expenses as we align our cost structure with the projected shape of our business. In addition, we progressed our efforts in the quarter to rewire how we operate, including continuing to integrate digital technology and AI across the company. We anticipate these efforts will drive additional efficiencies going forward and significantly enhance the agility of the organization. So what does this mean between our growth portfolio performance and the business development activity I just referenced, including the Biontech Partnership and combined with our broad pipeline and strong financial discipline, we feel even better about our longer term growth potential. I want to take a moment and thank my colleagues around the globe who are committed to our mission to discover, develop and deliver innovative and life changing medicines to patients. With that, I'll turn it over to David.

David Elkins - Chief Financial Officer - (00:12:26)

Thank you Chris and good morning everyone. I'm pleased to report another strong quarter of execution. The growth portfolio continues to perform well and we continue to maintain cost discipline. Now Turning to the third quarter sales performance on Slide 7, total company sales were approximately $12.2 billion which reflects strong demand across our business. Global sales of the growth portfolio increased 17% driven primarily by demand across multiple brands, notably our IO portfolio, Rebozel, ChemXios and Brionzi. Beginning with a review of the oncology portfolio on slide 8, Opdiva Global sales were approximately $2.5 billion up 6% driven primarily by continued demand. In the US sales grew 6% to roughly $1.5 billion largely driven by a strong launch in MSI high colorectal cancer and continued share growth in first line non small cell lung cancer. This growth was achieved even as we saw expanded uptake of qvantig. Outside the US sales grew 6% driven by demand with expanded indications across multiple markets. We are pleased with the expanded growth of Givantic with sales of $67 million in the quarter. Growth was fueled by continued use across all indicated tumor types as well as the permanent J code received in the quarter. Due to the strong performance year to date, we we now expect global opdivo sales together with Givantic to deliver stronger growth than previously guided with sales expected to increase in the high single digit to low double digit range for the full year. Turning to our hematology performance on slide 9 Reblozel Global sales were $615 million in a quarter reflecting continued strength across our MDS associated anemia indications. We are annualizing over $2 billion in sales for the brand. In the US revenue growth continues to be strong up 38% primarily due to demand in Firstline RS positive and RS negative setting as well as improved duration of therapy. Outside the U.S. repozell sales grew 31% driven by demand in newly launched markets. Moving to Brionzi, sales were $359 million in the quarter and now annualizing over $1 billion. Global sales grew 58% reflecting strong demand across all indications. In US sales were $251 million growing 45% reflecting growth in large B cell lymphoma and expansion from new indications approved last year. Outside the U.S. sales were $109 million more than doubling due to continued strong demand across existing markets along with added demand from newly launched markets transitioning to our cardiovascular performance. On slide 10 starting with ChemXios, global sales increased 88% to $296 million reflecting continued robust demand. This is another asset in our growth portfolio also now annualizing over $1 billion. In the US sales were $238 million up 76% driven primarily by increasing new patient starts. Outside the US sales growth more than doubled driven by continued launch momentum in multiple markets. Eliquis Global sales were $3.7 billion growing 23% primarily driven by continued strong demand and the expected favorable impact of Medicare Part D redesign. U.S. sales grew 29% and ex U.S. sales grew 11%. Moving to immunology performance on slide 11 Sotik 2 sales grew 20% globally in the U.S. sales remained consistent with prior year due to demand being offset by higher rebates associated with our increased commercial access. Now turning to discuss Cabenfi on Slide 12 Cabenfi sales were $43 million in the quarter and $105 million year to date. As previously communicated, sales and weekly total prescriptions continue to grow steadily. We remain focused on disrupting the entrenched D2 prescribing behavior by educating physicians on CaBenfi's innovative profile and we've completed our field force expansion to increase reach and frequency to targeted healthcare professionals. Now let's move to the P and L On slide 13 gross margin was approximately 73% primarily due to product mix. As expected, operating expenses decreased by approximately $100 million to roughly $4.2 billion compared to the same period last year, primarily reflecting the savings from our ongoing Strategic Productivity Initiative. Our effective tax rate in the quarter was 22.3% reflecting our earnings mix. Overall diluted earnings per share was $1.63 due to strong performance in the quarter and includes net charges of approximately $530 million or $0.20 per share attributed to acquired in process RD and licensing income primarily related to the Phylochem Asset License and Systemun milestone payment. Turning to the balance sheet and capital allocation Highlights on Slide 14, our financial position remains strong. We generated cash flow from operations of about $6.3 billion in the third quarter with nearly $17 billion in cash, cash equivalents and marketable securities as of September 30th. Our capital allocation priorities remain unchanged as we continue to take a strategic and balanced approach. As Chris mentioned, in recent months we closed our license agreement with Filochem, announced the acquisition of Orbital Therapeutics and advanced our Systimmune partnership. Strategically investing in our growth portfolio. Brands along with business development are our top priorities. We also continue to be on track to further delever our balance sheet. As of the end of the third quarter, we have paid $6.7 billion of the $10 billion debt paydown we've committed to by the first half of 2026, and we remain committed to returning capital to our shareholders through the dividend. Now, turning to our non GAAP guidance on Slide 15, we are increasing our full year revenue guidance by $750 million at the midpoint to a range of $47.5 billion to $48 billion, primarily reflecting continued strong performance of our growth portfolio. We continue to expect the legacy portfolio to decline approximately 15 to 17% for the year and our Revlimid sales expectation remain at approximately $3 billion. Along with the continued impacts from generics of Pomalyst in Europe, Sprycel and Abraxene. Our gross margin guidance for the year remains unchanged at approximately 72% and our operating expense guidance also remains unchanged at approximately $16.5 billion, reflecting over $1 billion in net savings versus 2024. Regarding other income net, we now expect annual income of approximately $500 million due to higher than anticipated royalties, licensing income and favorable interest income. We are maintaining our full year tax guidance of approximately 18% as a result of our strong performance year to date, the midpoint of our revised 2025 non GAAP guidance would have increased by approximately $0.20 per share. This increase was offset by the net impact of acquired in process RD charges and licensing income, primarily related to filochem asset License and a System U milestone payment. As a result, we are narrowing our expected eps range for 2025 to be between $6.40 and $6.60, which leaves the midpoint of our range unchanged. Taken all together, I'm pleased with the performance of the business year to date and I'd like to thank our colleagues around the world for their continued focus and execution. With that, I'll turn the call back over to Chuck to start Q and A.

Chuck Triano - Senior Vice President and Head of Investor Relations - (00:20:07)

Thanks, David. And before we start our Q&A session, I want to note that questions related to questions related to our solid tumor development programs will be answered by Adam Lenkowski rather than Christian Masacesi during today's call and with.